Production growth accelerates, new orders hold above threshold; small and medium-sized enterprises still in contraction
China's manufacturing purchasing managers' index returned to expansion territory in September, crossing the key threshold of 50 that separates growth from contraction. The PMI is a gauge of economic conditions compiled from surveys of corporate purchasing managers on new orders, production, employment and inventories.
China's National Bureau of Statistics said Wednesday that the September manufacturing PMI came in at 50.1, up 0.3 points from 49.8 in August. A reading above 50 signals expansion, while one below 50 indicates contraction.
China's manufacturing PMI had rebounded to a one-year high of 50.4 in March before holding in positive territory through April (50.3), May (50.0) and June (50.3). It then slipped below the threshold in July (49.2) and August (49.8).
By company size, large enterprises posted a PMI of 50.6, matching the previous month and sustaining their expansion. Medium-sized firms rose 0.3 points to 49.7, while small firms climbed 1.0 point to 48.9 — both improvements, but both remaining in contraction.
Among the sub-indexes, production activity showed the most notable improvement. The production index rose 1.3 points to 51.7, indicating that the pace of expansion in manufacturing output accelerated.
The new orders index edged down 0.1 points to 50.5 but stayed above the threshold, suggesting that market demand continued to improve. The new export orders index slipped from 50.1 to 50.0, landing exactly on the threshold, while the imports index rose from 48.6 to 49.2 but remained in contraction.
The raw materials purchase price index jumped 4.2 points to 60.8, and the factory gate price index climbed 3.6 points to 54.0 from 50.4, pointing to intensifying raw material cost pressures on the factory floor.
Employment data released the same day deteriorated, however. The manufacturing employment index fell 0.3 points to 48.4, suggesting that hiring conditions weakened again. The business activity expectations index for future production and operations held steady at 53.8, unchanged from the previous month.
The non-manufacturing business activity index rose 1.2 points to 50.2 in September from 49.0 in August, with construction (50.3) and services (50.2) each improving — up 3.4 points and 0.9 points, respectively. Within services, telecommunications and broadcasting, and finance and insurance posted readings above 55, while capital markets services and real estate remained below the threshold.
Reuters attributed the return to manufacturing growth to a combination of factors: an easing of weather-related production disruptions that allowed factories to resume normal operations, and a global AI boom that has continued to support China's industrial sector.
yckim6452@heraldcorp.com
